Bitfinex Integrates Blockstream's Liquid Network for More Efficient Trading

Digital asset exchange Bitfinex has integrated Blockstream’s Liquid Network on its crypto trading platform. The Liquid Network is a cryptoasset settlement network which connects crypto exchanges and major institutions throughout the world, in order to facilitate quick and private bitcoin (BTC) transactions.

Liquid Network Facilitates “Rapid, Confidential, Secure” Transactions

As explained in a blog post, published on May 9, 2019, by Bitfinex’s management, the Liquid Network has been developed to meet the demands and requirements of cryptoasset traders. The settlement network aims to provide “rapid, confidential and secure” payment channels, which may be used to conduct Bitcoin transactions among different parties.

According to Bitfinex’s post, crypto traders will be able to “rapidly circulate Bitcoin and USDT” between different exchanges, in order to profit off of arbitrage and price fluctuations. This may potentially “inter-exchange spreads across major trading pairs,” Bitfinex’s blog explains.

In addition to creating tighter spreads, the integration of Blockstream’s Liquid Network will allow traders to “react to trading opportunities” a lot faster “due to significantly lowered settlement times,” Bitfinex noted. Moreover, Liquid Network integration will hide the “amounts and types” of cryptoassets being exchanged - which will “improve confidentiality” and reduce the chances of “front-running.”

Commenting on the benefits of adding the Liquid Network to Bitfinex’s trading platform, Paolo Ardoino, the Chief Technical Officer at Bitfinex, remarked:

Issuing Bitcoin, stablecoins, and various other digital assets under one blockchain platform makes a lot of sense. It reduces the integration burden for an exchange like ourselves, and traders can manage all their assets from a single wallet application. We’re excited to be active on the Liquid Network, and we’re looking forward to watching it develop.

Liquid Network May Be Used To “Tokenize Fiat Currencies”

As noted on Blockstream’s official website, the Liquid Network serves as a blockchain for cryptoaset “exchanges, brokers, and market makers.” As a settlement network, it includes a “Liquid’s Issued Assets feature,” which allows network participants to “tokenize fiat currencies, securities,” and digital assets.

According to Blockstream’s developers, digital assets on the Liquid Network are “traded within the same blockchain environment,” which is similar to the widely-used Bitcoin Core codebase. This helps to reduce the time required to perform integrations and it’s arguably a better option than using “multiple blockchains, clients, and APIs,” Blockstream’s development team states